Malaysia: The longest year

Published on Thu, 2013-04-04 11:52

Malaysia Petroleum Resources Corp(Photo: etp.pemandu.gov.my)

According to government data, Malaysia is said to be on the way towards achieving all eight MDGs; commitment is reflected in the Tenth Malaysia Plan (2011-2015). But Malaysia’s development trajectory has hitherto primarily been driven by a combination of low worker wages amidst high revenues for petroleum, palm oil and rubber commodities and foreign direct investment in the manufacturing sector. In other words, very little of the profits in the form of oil royalties, for example, have gone towards developing the states that produce a large bulk of the oil, such as Kelantan, Terengganu, Sabah and Sarawak, but which happen also to be the poorest states in Malaysia.

And while the government announced its motto to be “People First, Performance Now” and its goals to reduce crime; fight corruption; improve student outcomes; raise living standards of low-income households; improving rural basic infrastructure; and improve urban public transport, it appears that while lip-service has been paid, little pertaining to the structural and systemic inequities, inequalities and injustices of the political or social economy have been dealt with or addressed with any substance.

Malaysia’s inadequate financial, technological and market infrastructure and human capital have been pinpointed as reasons why it cannot compete in economically higher-value-added products and services. Coming out of the purported middle income trap and towards a high-income goal is supposed to embody the latest stage of Malaysia’s development trajectory.

Malaysia was significantly affected by the economic crisis in the United States and the European Union due to its dependence on export markets. In 2009, the Malaysian economy contracted 6.2% in the first quarter. The average annual GDP growth rate over that decade was 4.6%. Some quarters estimate that growth rates in 2013 will settle between 4.5% to 5.5%, while others have projected a lower 3.5%. Such figures compare poorly to the boom years of the last decades of the 20th century when Malaysia recorded growth of up to 8% yearly.

The Malaysian government acted significantly later than several other governments on the financial crisis even when it hit its shores in 2008. When it did, it received criticism for acting too little too late. But while the main goals of the package were purportedly to protect and create jobs, ease the burden of the crisis on the population, assist the private sector and build capacity for the future, critics of the stimulus plan not only cited the lack of transparency, but also the apparent use of the allocation to bail out the government’s business cronies while little was seen in the way of alleviating the impact of the crisis on lower-income earners. Almost half of the stimulus would have gone to the private sector; only 17% towards easing the burden of the ordinary people. A mere 1.4% was allocated for the less-fortunate.

Most Malaysians, in fact, would argue that being ‘trapped’ with a ‘middle income’ is a luxury they have not known. The Gini coefficient for 2009 was 0.441, little different from the previous 20 years. Malaysia has, in fact, the highest inequality in Southeast Asia. The Tenth Malaysia Plan admits that there are 2.4 million vulnerable households which make up the bottom 40% of the population.

Looking at the aggregate data, Malaysia is on track to achieve most of the MDGs by 2015. But when the achievements are disaggregated and examined more closely, it is apparent that much more needs to be done. In addition, a serious problem has arisen in the regional and international arena that poses a risk to all efforts at improving the socio-economic welfare and future of all Malaysians.

Yet, the overall tenure of Malaysian public life and the actions of its leaders suggest most have been so engrossed with partisan politics that questions and issues of what and how – as opposed to merely who – have been set aside. It remains to be seen whether the changes promised by leaders on both sides of the political divide will meet the hopes and aspirations of ordinary Malaysians, and whether real changes to the socio-economic and political-economic fabric of the country will take place for the betterment of its people to attain the future they want.